FIRST DIVISION
G.R. No. 240311, September 18, 2019
PHILIPPINE NATIONAL BANK, PETITIONER, v.
FELINA GIRON-ROQUE, DR. GLORIA M.
APOSTOL AND HUSBAND, DR. EDWARD
APOSTOL, RESPONDENTS.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the
Decision2 dated October 27, 2017 and the
Resolution3 dated June 13, 2018 of the Court of Appeals
(CA) in CA-G.R. CV No. 100017, which affirmed with
modification the Decision4 dated August 1, 2012 and the
Order5  dated November 29, 2012 of the Regional Trial
Court of Iba, Zambales, Branch 71 (RTC) in Civil Case
No. RTC-1551-I, and accordingly, ordered respondents
Dr. Gloria M. Apostol (Gloria) and her husband, Dr.
Edward Apostol (collectively, Spouses Apostol), to pay
petitioner Philippine National Bank (PNB) the amount of
P119,820.00, and deleted the award of attorney's fees in
favor of respondent Felina Giron-Roque (Felina).
The Facts
On April 7, 1995, Felina, a Filipino resident of the
United States of America (USA), obtained a credit line
from PNB in the amount of P230,000.00, which was
secured by a real estate mortgage of a real property
registered under Transfer Certificate of Title No. T-
45548.6  On February 10, 1997, she availed of a
P50,000.00 loan (first loan) from the credit line, as
evidenced by a promissory note7 of even date, with a due
date on August 9, 1997. When Felina was in the USA
sometime between April to August 1997, she
purportedly filed, through Gloria, a stand-by application
for further availment of the credit line in the amount of
P120,000.00 (second loan). Subsequently, she
discovered that Gloria withdrew from her account with
PNB a check (subject check) for the second loan in the
amount of P119,820.00. PNB demanded payment of
both loans but instead of paying, Felina requested for an
in-depth investigation of the second loan. 8
On December 10, 1998, Felina sent a letter9 to PNB and
included therein a cashier's check10 in the amount of
P16,000.00 as full payment of the first loan, which the
latter received on December 21, 1998. 11 In response,
PNB wrote Felina a letter12dated December 22, 1998,
returning the aforesaid cashier's check as the same was
insufficient to cover for the amount, interests, and
penalties of both loans.13Thereafter, PNB proceeded with
the extrajudicial foreclosure of Felina's real property. 14
Claiming that her signature in the subject check was
forged and that Gloria was not authorized to withdraw
from her PNB account, Felina filed a complaint 15 for
annulment of foreclosure sale and reinstatement of
unused credit accommodation with damages before the
RTC against both PNB and Spouses Apostol,
praying, inter alia, that: (a) the second loan in the
amount of P120,000.00, together with interests and
penalties, be declared null and void; (b) the amount of
P16,000.00 be declared as valid payment of her only
availment of the credit arrangement; and (c) the
extrajudicial foreclosure over her property be declared
null and void.16
In defense, Spouses Apostol maintained, among others,
that Gloria was duly authorized by Felina to withdraw
from the latter's credit line. For its part, PNB claimed
that it had exercised the required due diligence before
allowing the withdrawal. It added that there was no valid
tender of payment of the first loan, as it was tendered
one (1) day before the foreclosure date and the amount
was not enough to cover interest and penalty. By way of
a cross-claim, PNB averred that in the event Felina's
claim is sustained, Spouses Apostol should be ordered to
reimburse the amount of P119,820.00 which the latter
received from it.17
The RTC Ruling
In a Decision18 dated August 1, 2012, the RTC ruled in
Felina's favor, and accordingly: (a) declared the
extrajudicial foreclosure null and void; (b) directed PNB
to reinstate the unused credit accommodation of Felina;
and (c) ordered PNB and Spouses Apostol to pay Felina
attorney's fees in the amount of P100,000.00, plus costs
of suit.19
In so ruling, the RTC found that the subject check was
forged, considering that Felina could not have executed
it as she was in the USA at that time, and upon
comparison with the promissory note dated February 10,
1997, her alleged signature in the subject check was
found to have not been written by one and the same
person.20 Thus, the RTC concluded that PNB was remiss
of the diligence required of banking institutions in
allowing the withdrawal and encashment of the forged
check in favor of Gloria, who was not proven to be duly
authorized by Felina.21 Notably, however, the RTC made
no pronouncement as to the validity of Felina's tender of
payment in relation to the first loan.
PNB moved for reconsideration which was, however,
denied in an Order22 dated November 29, 2012.
Aggrieved, both PNB and Spouses Apostol appealed 23 to
the CA.
The CA Ruling
In a Decision24 dated October 27, 2017, the CA affirmed
the RTC ruling with modification, further ordering
Spouses Apostol to pay PNB the amount of
P119,820.00, and deleting the award of attorney's fees in
favor of Felina.25 It held that the foreclosure sale had no
basis since the loan in the amount of P120,000.00 was
void, considering that the subject check was forged and
Gloria was not duly authorized to withdraw from PNB.
It emphasized that, for being in an industry imbued with
public interest, PNB should have exercised extraordinary
diligence in handling the transaction.26 However, similar
with the RTC, the CA also made no pronouncement as to
the validity of Felina's tender of payment in relation to
the first loan.
Dissatisfied, PNB and Felina separately moved for
reconsideration27 but both were denied in a
Resolution28 dated June 13, 2018; hence, this petition by
PNB.
The Issue Before the Court
The issue for the Court's resolution is whether or not the
CA correctly affirmed the nullification of the
extrajudicial foreclosure proceedings covering Felina's
real property subject of the real estate mortgage.
The Court's Ruling
The petition is without merit.
At the outset, it must be pointed out that PNB
commenced extrajudicial foreclosure proceedings on
Felina's real property on the ground of the latter's non-
payment of the first and second loans inclusive of
interests and penalties, which as per the Statement of
Account29 provided by PNB to Felina, amounted to
P14,565.58 for the first loan and P148,608.33 for the
second loan, or a grand total of P163,173.91.
However, and as unanimously found by the courts a quo:
(a) Felina did not avail of the second loan, as her
signature in the subject check was forged; (b) Gloria was
not duly authorized to obtain the second loan from PNB;
and (c) PNB was remiss of the diligence required of a
banking institution in allowing the withdrawal and
encashment of the subject check representing the second
loan.30 Absent any cogent reason to overturn the
aforesaid findings, the Court is inclined to uphold the
same.31
In view of the nullity of the second loan, Felina's
outstanding balance to PNB has been significantly
reduced to the value of the first loan, plus interests and
penalties, amounting to P14,565.58. Significantly, Felina
tried to fully settle the same by tendering to PNB a
cashier's check in the amount of P16,000.00, which was
refused by the latter - on the notion that it was
insufficient to fully pay Felina's total loan obligations to
it, considering that at that time, the second loan was yet
to be nullified by judicial fiat. Verily, the remaining
balance of the first loan remains outstanding, due, and
demandable, albeit without fault of Felina as she already
tendered the aforementioned cashier's check through her
letter dated December 10, 1998 which PNB received on
December 21, 1998.
In this light, and in the interest of substantial justice, the
Court deems it prudent to give Felina a reasonable
opportunity to fully settle her remaining obligation to
PNB, in the amount of P14,565.58, plus interests and
penalties from the date of the Statement of Account on
September 15, 1998 until the date of PNB's receipt of the
cashier's check on December 21, 1998. In the meantime,
the Court affirms the annulment of the extrajudicial
proceedings, without prejudice to PNB's availment of the
proper remedies, should Felina fail to settle her loan
obligation despite being given the opportunity to do so.
WHEREFORE, the petition is DENIED. The Decision
dated October 27, 2017 and the Resolution dated June
13, 2018 of the Court of Appeals in CA-G.R. CV No.
100017 are
hereby AFFIRMED with MODIFICATION, in that:
(a) respondent Felina Giron-Roque is given a period of
sixty (60) days to settle the remaining balance of her
outstanding loan obligation to petitioner Philippine
National Bank (PNB) amounting to P14,565.58 plus
interests and penalties from September 15, 1998 to
December 21, 1998; and (b) the annulment of the
extrajudicial foreclosure of the real property registered
under Transfer Certificate of Title No. T-45548 shall be
without prejudice to PNB's availment of the proper
remedies, should the loan obligation remain unsettled
after the lapse of the aforementioned period. The rest of
the Decision STANDS.
SO ORDERED.